Shares of Bandhan Bank locked at 20% in early trade. Bandhan Bank comes out with IPO in March 2018, So with SEBI norms, they cannot sell their promoter holding in the secondary market before one year of completion, i.e. In March 2019. Promoter stakeholdings cane down from 89.62% to the current level. As per licensing norms, the bank had to bring down promoters stake to 40% from the current level of 82.28% within three years of commencing operations.

RBI barred Bandhan Bank from opening new branches. Bandhan Bank planned to 1000 branches with recent 937 branches by March 2019.According to the statement of CEO Chandra Shekhar Ghosh current restrictions on opening new branches not affect the business of the branch. While RBI frozen remuneration of Managing Director of Bank and chief executive Ghosh at recent levels for failing to reduce promoter’s stake to below 40%.

Analysts suggest merging the lender its promoter Bandhan Financial Holdings Ltd and Bandhan Financial Services Ltd, which holds the holding company.

The regulators want compliance and investors want returns. Bandhan Bank may pull the heartstrings of the public with its banking for the poor image, but to pull the purse strings of its investors, the lender needs to find its way out of this quandary as early as possible, without too many of its shares coming into the market and depressing prices.

On Bandhan Bank’s part, either it was overconfident that its promoter shareholding will reduce by half in a jiffy or it decided to jump in without analyzing the consequences. Nevertheless, it now had its wings clipped.

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